No iOS 5 Integration, No Credits Deal — The Facebook-Apple Relationship Cools

Until the launch of Ping, the music social network feature in iTunes, last fall, Apple looked like it was getting close with Facebook. After yesterday, though, the two companies have never looked more distant. Facebook is not getting any special integration with Apple, and the two companies do not appear to be working together on Credits — contrary to a recent statement by a gaming executive from Ubisoft.

A relationship had at one point seemed natural. Facebook wanted to counter the threat of Google social products, while Apple was aiming to differentiate itself from the Android mobile operating system. Facebook for iPhone, the best-in-class mobile social networking app that has dominated the iTunes App Store for years, seemed to prove that millions of people wanted the two companies together.

Instead it has been Facebook’s microblogging rival, Twitter, that has gotten the special attention, as Apple reinforced yesterday at Apple’s Worldwide Developer Conference in San Francisco. Twitter is being built directly into iOS 5, the new version of the mobile operating system coming this fall. Users will be able to tweet directly from in-house apps including Camera, Photos, Contacts, the Safari web browser, as well as (Google-derived) Maps and YouTube. Meanwhile, Twitter API access in iOS 5 will make it easier than ever for mobile app developers to integrate it as a single sign-on option.

The only time Apple speakers referenced Facebook yesterday was an off-hand mention of its iPhone app as one of a variety of apps that you could get notifications for in the new Notifications Center.

> Continue reading on Inside Mobile Apps.

As Zynga Looks to IPO, Its Traffic on Facebook Stays High

Most developers on Facebook have many ups and downs, with an emphasis on the downs over the last 12 months or so as Facebook has cut back on viral channels. Zynga stands out not just for dwarfing the rest of the market, but because it has managed to keep traffic so high for so long.

A look back at the past few years in AppData provides a quick explanation of Zynga’s story, that will get the attention of investors trying to decide how to value it when it reportedly files to go public later this year.

The Data Timeline

At the end of 2008, Zynga was in a pretty good position. It had figured out how to monetize through virtual goods in its first hit, Texas Hold’Em Poker. It was in the process of launching Mafia Wars and a long line of other text-based role-playing games on Facebook, MySpace and other social networks. It was on its way to dominating that category through copying the competition, then using a careful combination of aggressive viral tactics, gradual but consistently improving game quality, back-end scaling expertise to handle the incoming traffic at the right times, and everything else that would eventually become the so-called “Zynga Playbook.”

It had 23.9 million monthly active users.

(Note that you can access the full data history for Zynga and its games, in our AppData Pro tracking service.)

Almost all of its growth since then came in 2009. It moved into the simulation category with the launch of FarmVille in June of that year, with the tailwind of Facebook’s spammily-designed Twitter style of news feed pushing the game far and wide across the social network. It also had capitalized on Facebook’s increasingly sophisticated advertising tool to cheaply and effectively reach users before most other developers (or other advertisers) were. Well-timed investments into all parts of the company, including fast hiring of experienced leaders in gaming, and in business and technical fields in other parts of Silicon Valley — a story that the company hasn’t talked about much yet.

> Continue reading on Inside Social Games.

Facebook Wins Patents For Tagging in Photos, Other Digital Media

Tagging was arguably the feature that made Facebook the biggest photo site in the world and seeded the idea for creating the platform.

Now the company has finally won a patent for it.

Nearly five years after the company originally filed for the invention, the U.S. Patent and Trademark Office gave Facebook a patent protecting the ability to select a region in a piece of media (like a photo or video) and associate people or other entities with it. Mark Zuckerberg, longtime designer-turned-product architect Aaron Sittig and former Facebook engineer Scott Marlette were credited as inventors.

Zuckerberg has long talked about photo tagging as the innovation that helped him and other early Facebook employees initially conceive of the idea for the platform. The company did a competitive analysis of all other photo products out on the web and while Facebook didn’t offer features like high resolution or printing, it still outcompeted rivals simply because it centered its product around people, and not around technical capabilities. Last year the company said it was seeing more than 100 million photo uploads a day. It has not updated that statistic since.

Because of photo tagging’s initial success, the company started thinking about other products and verticals that could be reinvented around social behavior. When it became clear that with limited engineering resources, the company wouldn’t be able to create every single possible idea on top of the social graph, it opened up the ability for other third-party developers to do so.

The company won one other patent in the last month too: the ability to give gifts in a social networking environment. This one was credited to Jared Morgenstern, who is a product manager on the games team. Gifts were ultimately deprecated in 2010, but virtual goods have become an indirect source of revenue for the company through its currency Credits.

Facebook also applied for four search-related patents in the last month that control how results are shown to users based on their social proximity to the information or how often they access it. All of those patents are credited to Christopher Lunt, Nicholas Galbreath and Jeffrey Winner.

Featured Facebook Campaigns: Virgin America, Seattle’s Best Coffee, DreamWorks, Toyota and More

Celebrities, videos, check-ins, free food, cartoons and games were used in our featured Facebook campaigns this week, with varying results. The DNA Foundation incorporated celebrities, videos and pulling in a user’s photo to be a part of the campaign. Virgin America compiled check-ins to promote a new airport terminal while Aveda used check-ins to raise money for Japan disaster relif. Seattle’s Best Coffee gives out free coffee and laughs, Pretzel Crisps also gave out free food, and a Toyota vehicle became an in-game virtual good in Monopoly Millionaires.

We’ve excerpted two of the campaigns below. You can see the full week’s coverage in the Facebook Marketing Bible, which also includes detailed breakdowns of dozens of other featured campaigns by top-performing brands and businesses on Facebook.

Virgin America’s Terminal 2 Takeover Leaderboard

Goal: Network Exposure, Engagement, Product Purchase

Core Mechanic: A Facebook or Foursquare check-in leaderboard, Terminal 2 Takeover, at San Francisco International Airport’s Terminal 2.

Method: Essentially, the Context Optional app aggregates mobile check-ins on the T2 Takeover tab of Virgin America’s Facebook Page. The leaderboard launched on April 9 and so far there are 101 check-ins on the tab. Users can check-in at several spots around Terminal 2 to win points, move up on the leaderboard and receive badges such as: Ground Crew, Flight Crew, Navigator, Co-Pilot and Captain.

Impact: So far the check-ins number 101; the Page’s total Likes passed 90,000.

DreamWorks Animation’s “Kung Fu Panda 2” Fan Parade

Goal: Engagement, Network Exposure, Product Purchase, Page Growth

Core Mechanic: A Facebook Connect application that pulls a users’ photo and allows them to select an avatar in keeping with the “Kung Fu Panda 2” movie to participate in the “parade” to celebrate the movie’s May 26 release.

Method: The Connect application for “The Awesomest Parade Ever” pulls the users’ photo, but also the photos of that user’s friends. When the user’s avatar starts the “parade” with other “Kung Fu Panda 2,” their avatar leads and eventually avatars with the profile photos of a user’s friends begin the parade as well. When a user spots a friend they want to bring into the app, they can click on their avatar and publish a “snapshot” to their friend’s Wall, as though they were in a real parade.

Impact: Overall this is a strong, innovative, intuitive viral mechanic in keeping with the theme of the “Kung Fu Panda 2” movie.

How are top brands in the industry designing their Facebook marketing campaigns? See the Facebook Marketing Bible for detailed breakdowns of dozens of Featured Campaigns by top-performing brands and businesses on Facebook.

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011, Is Here

Games on social networks became a billion dollar business in 2010, enabling the market’s big developers to secure significant investments and pursue sizable exits. Now that Zynga has clearly established itself as the 800 pound gorilla, EA/Playfish are bringing more IP to market, and Playdom is being integrated across Disney, what opportunities remain for other small and medium sized social game developers in 2011?

Inside Network is proud to announce a new original research report by Justin Smith and Charles Hudson profiling social gaming developers outside the largest, most established companies, entitled Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011. This report presents direct interview results from today’s most influential small and mid-sized developers aside from larger players Zynga, Playfish, Playdom, CrowdStar, and Kabam.

Get the Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495

OR Buy Single Report: $995

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 is available for the first time today.

What are top mid-sized developers’ expectations for the social gaming space in 2011? How will existing players fare as Facebook shifts the social gaming landscape through the rollout of Facebook Credits and continued changes to the platform? Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 shares insights directly from the front lines on social game monetization, development, and customer acquisition and growth.

About the Report

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 shares insights from over two-dozen developers into key questions facing social gaming in 2011.

As with previous editions of Inside Virtual Goods, researchers Justin Smith and Charles Hudson have conducted several months of original research comprising interviews with developers and entrepreneurs in social gaming. This edition of Inside Virtual Goods will present exclusive interview results from the developers themselves, preceded by original profiles of all companies included in the survey. Social gaming is among today’s most competitive areas in technology; specific responses have been anonymized to encourage authentic, critical response.

What We Cover

  1. Overview of the competitive landscape – Over the past year, the social gaming industry has been shaped and reshaped by enormous growth, market consolidation, and changes to payments and monetization brought on by the spread of Facebook Credits. What kind of competitive landscape and new opportunities should today’s developers anticipate in the year ahead?
  2. Profiles of key players – Companies like Zynga, EA / Playfish, and Disney / Playdom are regular topics in business news, but social gaming is an industry with dozens more key players whose rivalry and innovation are determining what the industry will look like in six and nine months. This section presents detailed, original profiles of the middle market companies to watch in 2011.
  3. Developer perspectives on the key issues – The responses in this section have been curated to reflect the diversity of viewpoints in today’s vibrant social gaming industry, and cover the following areas:
    • Distribution
    • Monetization and credits
    • Game design and development
    • Fundraising

See the full table of contents below:

Table of Contents

New Insights on the Competitive Landscape

In 2010, social games began to show what kind of value can be created on top of social networks. 2011 will be an even more important year.

The social gaming market is evolving rapidly against a backdrop of shifting challenges, and still-emerging opportunities — social gaming will be this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

One year of original data and exclusive in-depth reports delivered on a quarterly basis is $2,495 and contains:

  • A detailed overview of the current state of the industry
  • Specific estimates on market size by segment
  • Diagnosis of key opportunities and issues by segment

About the Authorsjustin-smith-headshot

Justin Smith

Founder, Inside Network

Justin Smith is the founder of Inside Network, the first company dedicated to providing news and market research to the Facebook platform and social gaming ecosystem. Justin leads Inside Network’s Inside Virtual Goods and AppData research and data services, and serves as co-editor of Inside Facebook and Inside Social Games.

Prior to Inside Network, he was formerly Head of Product at Watercooler, one of the leading application and game developers on the Facebook Platform. Prior to Watercooler, Justin was an early employee at Xfire, the largest social utility for gamers, which was sold to Viacom in 2006. Justin holds a degree in Computer Systems Engineering from Stanford University.

charles-hudson-headshotCharles Hudson

Former VP Business Development, Serious Business

Charles Hudson is the former VP of Business Development for Serious Business, a leading social games developer on the Facebook platform.

Prior to Serious Business, he was formerly the Sr. Director for Business Development at Gaia Interactive, a leading online hangout for teens. Prior to Gaia, Charles worked in New Business Development at Google and focused on new partnership opportunities for early-stage products in the advertising, mobile, and e-commerce markets. Prior to joining Google, he was a Product Manager for IronPort Systems, a leading provider of anti-spam hardware appliances that was acquired by Cisco Systems for $830 million in 2007. Charles holds an MBA and BA from Stanford University.

Get The Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495

OR Buy Single Report: $995

The one year subscription includes three quarterly updates on key developments in the space. Or, you can download just this report.

Index of companies profiled: 50 Cubes, 6waves, A Bit Lucky, Casual Collective, Cie Games, Digital Chocolate, Five Minutes, Funzio, Gaia Online, GameHouse, GSN, Happy Elements, iWin/Backstage, Lionside, Lolapps, Metrogames, MindJolt, OMGPOP, PopCap, RockYou, Social Point, TheBroth, Ubisoft, Wooga, ZipZapPlay

Last Week to Pre-Order Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011

Games on social networks became a billion dollar business in 2010, enabling the market’s big developers to secure significant investments and pursue sizable exits. Now that Zynga has clearly established itself as the 800 pound gorilla, EA/Playfish are bringing more IP to market, and Playdom is being integrated across Disney, what opportunities remain for other small and medium sized social game developers in 2011?

Inside Network is proud to announce a new original research report by Justin Smith and Charles Hudson profiling social gaming developers outside the largest, most established companies, entitled Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011. This report presents direct interview results from today’s most influential small and mid-sized developers aside from larger players Zynga, Playfish, Playdom, CrowdStar, and Kabam.

Get the Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD*

OR Buy Single Report: $995 $795 USD*

* Pre-order discount ends March 28, 2011. All pre-ordered reports will be delivered on March 29, 2011.

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 is available for discount pre-order now, and will be released to the public on March 29.

What are top mid-sized developers’ expectations for the social gaming space in 2011? How will existing players fare as Facebook shifts the social gaming landscape through the rollout of Facebook Credits and continued changes to the platform? Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 shares insights directly from the front lines on social game monetization, development, and customer acquisition and growth.

About the Report

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 shares insights from over two-dozen developers into key questions facing social gaming in 2011.

As with previous editions of Inside Virtual Goods, researchers Justin Smith and Charles Hudson have conducted several months of original research comprising interviews with developers and entrepreneurs in social gaming. This edition of Inside Virtual Goods will present exclusive interview results from the developers themselves, preceded by original profiles of all companies included in the survey. Social gaming is among today’s most competitive areas in technology; specific responses have been anonymized to encourage authentic, critical response.

What We Cover

  1. Overview of the competitive landscape – Over the past year, the social gaming industry has been shaped and reshaped by enormous growth, market consolidation, and changes to payments and monetization brought on by the spread of Facebook Credits. What kind of competitive landscape and new opportunities should today’s developers anticipate in the year ahead?
  2. Profiles of key players – Companies like Zynga, EA / Playfish, and Disney / Playdom are regular topics in business news, but social gaming is an industry with dozens more key players whose rivalry and innovation are determining what the industry will look like in six and nine months. This section presents detailed, original profiles of the middle market companies to watch in 2011.
  3. Developer perspectives on the key issues – The responses in this section have been curated to reflect the diversity of viewpoints in today’s vibrant social gaming industry, and cover the following areas:
    • Distribution
    • Monetization and credits
    • Game design and development
    • Fundraising

See the full table of contents below:

Table of Contents

I. Introduction

II. Company Profiles

  1. 50 Cubes
  2. 6waves
  3. A Bit Lucky
  4. Casual Collective
  5. Cie Games
  6. Digital Chocolate
  7. Five Minutes
  8. Funzio
  9. Gaia Online
  10. GameHouse
  11. GSN
  12. Happy Elements
  13. iWin/Backstage
  14. Lionside
  15. Lolapps
  16. Metrogames
  17. MindJolt
  18. Omgpop
  19. Popcap
  20. RockYou
  21. Social Point
  22. TheBroth
  23. Ubisoft
  24. Wooga
  25. ZipZapPlay

III. Developer Perspectives

  1. Distribution
    • Viral Channels
    • Paid Acquisition
    • Off-Facebook Channels
  2. Monetization
    • Credits Integration
    • Results with Credits
    • Credits Issues
  3. Game Design & Development
    • Projected Budgets and Timelines
    • Target Audience
    • Genre Innovation
  4. Financing Landscape
    • Fundraising Plans
    • Perspective on M&A

IV. Conclusion

New Insights on the Competitive Landscape

In 2010, social games began to show what kind of value can be created on top of social networks. 2011 will be an even more important year.

The social gaming market is evolving rapidly against a backdrop of shifting challenges, and still-emerging opportunities — social gaming will be this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

One year of original data and exclusive in-depth reports delivered on a quarterly basis is $2,495 and contains:

  • A detailed overview of the current state of the industry
  • Specific estimates on market size by segment
  • Diagnosis of key opportunities and issues by segment

About the Authorsjustin-smith-headshot

Justin Smith

Founder, Inside Network

Justin Smith is the founder of Inside Network, the first company dedicated to providing news and market research to the Facebook platform and social gaming ecosystem. Justin leads Inside Network’s Inside Virtual Goods and AppData research and data services, and serves as co-editor of Inside Facebook and Inside Social Games.

Prior to Inside Network, he was formerly Head of Product at Watercooler, one of the leading application and game developers on the Facebook Platform. Prior to Watercooler, Justin was an early employee at Xfire, the largest social utility for gamers, which was sold to Viacom in 2006. Justin holds a degree in Computer Systems Engineering from Stanford University.

charles-hudson-headshotCharles Hudson

Former VP Business Development, Serious Business

Charles Hudson is the former VP of Business Development for Serious Business, a leading social games developer on the Facebook platform.

Prior to Serious Business, he was formerly the Sr. Director for Business Development at Gaia Interactive, a leading online hangout for teens. Prior to Gaia, Charles worked in New Business Development at Google and focused on new partnership opportunities for early-stage products in the advertising, mobile, and e-commerce markets. Prior to joining Google, he was a Product Manager for IronPort Systems, a leading provider of anti-spam hardware appliances that was acquired by Cisco Systems for $830 million in 2007. Charles holds an MBA and BA from Stanford University.

Get The Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD*

OR Buy Single Report: $995 $795 USD*

* Pre-order discount ends March 28, 2011. All pre-ordered reports will be delivered on March 29, 2011.

Although the report will not be released until Tuesday, March 29, we are offering a special pre-order discount for those who purchase now. A one year subscription is $1,995 until March 28, at which point the price will go to US $2,495. The one year subscription includes three quarterly updates on key developments in the space.

Or, you can download just this report. The pre-order price is $795 until March 28, at which point the price will go to US $995.

Announcing Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011

Games on social networks became a billion dollar business in 2010, enabling the market’s big developers to secure significant investments and pursue sizable exits. Now that Zynga has clearly established itself as the 800 pound gorilla, EA/Playfish are bringing more IP to market, and Playdom is being integrated across Disney, what opportunities remain for other small and medium sized social game developers in 2011?

Inside Network is proud to announce a new original research report by Justin Smith and Charles Hudson profiling social gaming developers outside the largest, most established companies, entitled Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011. This report presents direct interview results from today’s most influential small and mid-sized developers aside from larger players Zynga, Playfish, Playdom, CrowdStar, and Kabam.

Get the Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD*

OR Buy Single Report: $995 $795 USD*

* Pre-order discount ends March 28, 2011. All pre-ordered reports will be delivered on March 29, 2011.

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 is available for discount pre-order now, and will be released to the public on March 29.

What are top mid-sized developers’ expectations for the social gaming space in 2011? How will existing players fare as Facebook shifts the social gaming landscape through the rollout of Facebook Credits and continued changes to the platform? Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 shares insights directly from the front lines on social game monetization, development, and customer acquisition and growth.

About the Report

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 shares insights from over two-dozen developers into key questions facing social gaming in 2011.

As with previous editions of Inside Virtual Goods, researchers Justin Smith and Charles Hudson have conducted several months of original research comprising interviews with developers and entrepreneurs in social gaming. This edition of Inside Virtual Goods will present exclusive interview results from the developers themselves, preceded by original profiles of all companies included in the survey. Social gaming is among today’s most competitive areas in technology; specific responses have been anonymized to encourage authentic, critical response.

What We Cover

  1. Overview of the competitive landscape – Over the past year, the social gaming industry has been shaped and reshaped by enormous growth, market consolidation, and changes to payments and monetization brought on by the spread of Facebook Credits. What kind of competitive landscape and new opportunities should today’s developers anticipate in the year ahead?
  2. Profiles of key players – Companies like Zynga, EA / Playfish, and Disney / Playdom are regular topics in business news, but social gaming is an industry with dozens more key players whose rivalry and innovation are determining what the industry will look like in six and nine months. This section presents detailed, original profiles of the middle market companies to watch in 2011.
  3. Developer perspectives on the key issues – The responses in this section have been curated to reflect the diversity of viewpoints in today’s vibrant social gaming industry, and cover the following areas:
    • Distribution
    • Monetization and credits
    • Game design and development
    • Fundraising

See the full table of contents below:

Table of Contents

I. Introduction

II. Company Profiles

  1. 50 Cubes
  2. 6waves
  3. A Bit Lucky
  4. Casual Collective
  5. Cie Games
  6. Digital Chocolate
  7. Five Minutes
  8. Funzio
  9. Gaia Online
  10. GameHouse
  11. GSN
  12. Happy Elements
  13. iWin/Backstage
  14. Lionside
  15. Lolapps
  16. Metrogames
  17. MindJolt
  18. Omgpop
  19. Popcap
  20. RockYou
  21. Social Point
  22. TheBroth
  23. Ubisoft
  24. Wooga
  25. ZipZapPlay

III. Developer Perspectives

  1. Distribution
    • Viral Channels
    • Paid Acquisition
    • Off-Facebook Channels
  2. Monetization
    • Credits Integration
    • Results with Credits
    • Credits Issues
  3. Game Design & Development
    • Projected Budgets and Timelines
    • Target Audience
    • Genre Innovation
  4. Financing Landscape
    • Fundraising Plans
    • Perspective on M&A

IV. Conclusion

New Insights on the Competitive Landscape

In 2010, social games began to show what kind of value can be created on top of social networks. 2011 will be an even more important year.

The social gaming market is evolving rapidly against a backdrop of shifting challenges, and still-emerging opportunities — social gaming will be this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

One year of original data and exclusive in-depth reports delivered on a quarterly basis is $2,495 and contains:

  • A detailed overview of the current state of the industry
  • Specific estimates on market size by segment
  • Diagnosis of key opportunities and issues by segment

About the Authorsjustin-smith-headshot

Justin Smith

Founder, Inside Network

Justin Smith is the founder of Inside Network, the first company dedicated to providing news and market research to the Facebook platform and social gaming ecosystem. Justin leads Inside Network’s Inside Virtual Goods and AppData research and data services, and serves as co-editor of Inside Facebook and Inside Social Games.

Prior to Inside Network, he was formerly Head of Product at Watercooler, one of the leading application and game developers on the Facebook Platform. Prior to Watercooler, Justin was an early employee at Xfire, the largest social utility for gamers, which was sold to Viacom in 2006. Justin holds a degree in Computer Systems Engineering from Stanford University.

charles-hudson-headshotCharles Hudson

Former VP Business Development, Serious Business

Charles Hudson is the former VP of Business Development for Serious Business, a leading social games developer on the Facebook platform.

Prior to Serious Business, he was formerly the Sr. Director for Business Development at Gaia Interactive, a leading online hangout for teens. Prior to Gaia, Charles worked in New Business Development at Google and focused on new partnership opportunities for early-stage products in the advertising, mobile, and e-commerce markets. Prior to joining Google, he was a Product Manager for IronPort Systems, a leading provider of anti-spam hardware appliances that was acquired by Cisco Systems for $830 million in 2007. Charles holds an MBA and BA from Stanford University.

Get The Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD*

OR Buy Single Report: $995 $795 USD*

* Pre-order discount ends March 28, 2011. All pre-ordered reports will be delivered on March 29, 2011.

Although the report will not be released until Tuesday, March 29, we are offering a special pre-order discount for those who purchase now. A one year subscription is $1,995 until March 28, at which point the price will go to US $2,495. The one year subscription includes three quarterly updates on key developments in the space.

Or, you can download just this report. The pre-order price is $795 until March 28, at which point the price will go to US $995.

The Facebook Credits GetBalance API Helps Developers Dynamically Price Virtual Goods

Facebook has released the getBalance API call as an incentive to game developers who use Facebook Credits as their exclusive premium in-game currency. The call lets developers determine the Credits balance of any of their users. This allows them to identify high rollers with a large balance of Credits and dynamically price virtual goods to increase purchase probability or profit margin, improving monetization.

However, if developers change prices on users without disclosing the changes, they are risking significant backlash. Users might feel cheated, and stop playing the game, or other games by the developer — and they might also spread the word to others. A variety of fan sites and communities cover details like prices, and they’d be sure to notice price discrepancies and help spread the word. Also, it’s worth noting that developers who use their own proprietary premium virtual currency can see balances of their users, so getBalance really just creates parity between developers who do and do not use Credits as their in-game currency.

What the getBalance API does

Starting July 1st, all Facebook games must process payments exclusively through Facebook Credits, Facebook’s virtual currency. Developers can either use Credits as their payment method, allowing users to purchase a game’s proprietary premium in-game currency with Credits, or use Credits as their premium currency. Facebook wants developers to use Credits as their in-game currency (PDF) because it removes an extra step from the spending flow, as Credits as a payment method requires users to buy to credits to buy premium currency to buy virtual goods.

Facebook is incentivizing developers to use of Credits as their premium currency by making several special API calls available to those that do, including Buy with Friends and Frictionless Payments. Buy with Friends lets users share a discount on a virtual good with friends, while Frictionless Payments lets developers instantly sell users up to $3 worth of virtual goods without interrupting game play with a purchase confirmation step.

Frictionless Payments requires developers to display a user’s balance to them after purchase. To do this, developers can call the getBalance API for any of their users:

$ret = $facebook->api_client->users_getStandardInfo($user_id, array('credit_balance'));

But there are significant additional benefits to this API call,  which quietly became available at the end of January. It allows developers it to determine if a user is a high roller who maintains a large balance of Credits, indicating that they actively purchase Credits and will likely have a high lifetime value. Developers can also tell if a user maintain no balance and may not be a paying customer, or that they maintain a small balance, indicating that they may only buy as many Credits as they need at a time and might not spend as freely.

Facebook Credits project manager Reshma Khilnani confirmed with us that developers could use this data to optimize their monetization strategy. They might seek to reward high rollers with special rewards in hopes of winning their loyalty and turning them into a whales, or high-return social gamers who spends from $25 up to tens of thousands of dollars.

Developers might reduce the price of virtual goods when a high roller first starts playing in an effort to get them hooked, gradually increasing prices with time. Alternatively, developers of games with a low user lifespan could jack up prices to squeeze money out of them before they leave, though a slow-and-steady monetization strategy is usually more fruitful.

For those with a small balance, developers could dynamically price their virtual goods so users could make purchases without having to stop and buy more Credits from Facebook. They could also price a virtual good that is crucial to advancement just above the user’s current balance, compelling them to buy more Credits, and then lower prices to get the now Credits-flush user to fritter away their balance.

But as we said earlier, developers should remember that they may risk their reputations over their use of this feature.

The getBalance API opens a whole new level of strategy to virtual goods pricing. Large developers with huge volumes of data will be able to deduce patterns and discover tricks to help them maximize user spend. The API could even create a market for Credits balance analytics services that bring these insights to smaller developers.

Rarely in the physical world do retailers get the chance to look inside a potential customer’s wallet and price their wares accordingly. The getBalance API is a persuasive reason for developers to switch to Credits as their premium in-game currency, and an opportunity for them and Facebook to significantly improve monetization of games.

Facebook Pushes HTML5 Among Game Developers — A Key Part of Mobile Strategy

Facebook’s Cory Ondrejka, who recently joined the company last fall as part of the Walletin acquisition, appears to be stepping up as the platform’s advocate of HTML5 — a central piece of the company’s mobile strategy going forward. Facebook wants developers to choose HTML5 over building native iOS or Android apps, so the company can sidestep relatively closed intermediaries like Apple when it wants to roll out new platform functionality or bring products like Credits to mobile games.

Ondrejka is giving a talk tonight about game performance with HTML5. During a recent hackathon, he and others developed JSGameBench — a way of exploring high-performance gaming using HTML5. The program draws moving, animated sprites as fast as possible at 30 frames per second against a background with both axis-aligned and rotated sprites.

They used JSGameBench to test browser performance at drawing the sprites — Microsoft’s Internet Explore 9 came out on top followed by Google’s Chrome 10, with more than 1,000 sprites per frame. Ondrejka said that 50 sprites per frame is generally the lowest amount needed for good game performance.

Right now, Facebook has weak penetration among top mobile developers with only half of the best-selling iOS apps of all-time having some sort of connection to the platform. Even if an app has a Facebook integration, only a minority of users elect to use it over logging in a different way. Top iOS developer Pocket Gems, for example, said three weeks ago that it has had 18 million downloads so far and is making well over $1 million a month. Yet, we only pick up a little over 217,000 monthly active users logged into the company’s top game Tap Zoo through Facebook on AppData. On Instagram, we pick up 333,826 monthly active Facebook users, even though the company says MAUs are at least twice as high.

On top of that, Apple is stepping up enforcement around in-app payments, a move that would complicate any plans to bring Credits to mobile devices. Getting its core community of developers to choose HTML5 over native apps would give Facebook better access to downstream revenues and a cut of virtual goods transactions on phones.

Visa Enters Virtual Good Payment Industry with Acquisition of Playspan

Global payments technology company Visa has announced an agreement to acquire online game monetization-as-a-service provider Playspan for $190 million cash. The acquisition will allow Visa to start taking a cut of virtual good market, which will grow from $1.6 billion in 2010 to $2.1 billion in 2011, according to our Inside Virtual Goods report.

Founded in 2006, Playspan helps developers by allowing users make in-game payments and buy Credits through Facebook’s integration of its UltimatePay product that accepts 85 local payment methods from 180 countries. Developers can integrate the pop-up UltimatePay lightbox that shows users relevant payment methods based on their location and more.

Playspan sells pre-paid Ultimate Game Cards in retail locations so users can purchase virtual currency and goods without a credit card. The company also powers custom virtual goods storefronts, lets publishers create their own virtual currency or subscription products, and provides analytics. Its services work across web and mobile interfaces and all game types, and its publisher partners include Disney/Playdom, EA/Playfish, IMVU, and Ubisoft.

To date, Playspan has raised $46 million over several rounds from Easton Capital Group, Menlo Ventures, Vodafone Ventures and others. Thanks to the acquisition, early investors will see a sizable return, though late round investors may only double their money.

Playspan will join electronic payment security company CyberSource that Visa recently acquired in the payment technology giant’s growing digital and mobile ecommerce division.Visa could lends its reputable brand name to Playspan’s products, increasing user trust. Our survey on user preferences for social game payments showed that Visa was a highly preferred payment method, and was significantly more preferred and recognizable than Playspan’s Ultimate Game Cards.

Visa seems determined not to be left behind as more purchases move from brick and mortar retail stores to digital storefronts, games, and online media. Playspan’s technology and industry experience will help Visa stay relevant, and Visa will provide the monetization service more legitimacy.

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